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Question - Evaluate the purchase of an existing 1050 unit apartment complex for $15000000, the building is assumed to have a 20 year functional life. Treat the rents as being collected at the end of each year, along with associated variable and fixed costs. Assume rent controls will prohibit the rent from being raised over the life of the building. Assume that the underlying property reverts to the original owners at the end of twenty years, and that you will also be responsible for demolition and clean-up costs, to be incurred at the end of the building's life. Rentals are estimated at 945 units per year. Each unit will be rented for a cumulative monthly amount of $15000 per year. Cost per unit when rented $9000 per year. Fixed costs $2000000 per year for the building, other than the initial investment. Demolition/Clean up $8500000 after-tax. Depreciation is to be straight-line. Assume the project can be financed at 7% (before-tax) using debt. Tax Rate is 35%. Having studied market downturns, you estimate that a worst case scenario would entail rental of about 70% of the apartments at 70% of the normal rent. Also estimate a maximum value for the project assuming the building can maintain a rental rate of 98%, at a 9% premium over the currently planned rent. Assume before tax required return at 7%. What is the NPV of the worst case scenario?
Desmond Drury and Ty Wilkins have decided to form a partnership. They have agreed that Drury is to invest $27,300 and that Wilkins is to invest $63,700. Drury is to devote full time to the business, and Wilkins is to devote one-half time. For each pl..
Lucent Technology, The net income is $95MM. The depreciation cost is $15MM. What is the subject firm's cash flow from operations (CFO)?
Calculate the net present value of the proposed change, that is, the net benefit or net loss in present vaklue terms of the proposed changeover and should Henry purchase the new machine?
Post the Journal Entries you made in Part A to the appropriate T-Accounts found here in Part B. Your T-Account entries must be properly linked to the Journal Entry amounts you entered in Part A. The first T-Account posting has been done for you.
What would be included in the entry to record actual Manucatoring overhead costs incurred in a process department?
$60,000 for more than 5 hotels, what is the break even point in terms of the number of hotels that need to be sold and be operating each year?
Land and a warehouse were acquired for $890,000. What amounts should be recorded in the accounting records for the land and for the warehouse
June will invest 4,000 a year for 20 years in a fund that will earn 12% annunal interest. If the first payment occurs at year end, what amount will be in the fund in 20 years? If the first payment into the fund occurs today, what amount will be in th..
Clark had consolidated current assets of $320,000. What amount should Clark report in its December 31, year 1 consolidated balance sheet for current assets?
The Chilled Leisure Company (CLC), Calculate what the Return on Investment (ROI) for the Casino Resort Division will be for 2019?
Evaluate total fixed manufacturing overhead Evaluate variable manufacturing overhead per direct labor-hour Determine total direct labor-hours to be worked Net actual manufacturing overhead costs incurred
Prepare a monthly flexible manufacturing overhead budget for 2010 for the expected range of activity, using increments of 1,000 direct labor hours.
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